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February 23, 2010 6:09 PM

Shearman, Paul Weiss Advise on Indian Investment in U.S. Asset Manager

Posted by Brian Baxter

Companies from emerging markets continued to make an impact in the international arena on Tuesday, as Indian financial services firm Religare announced it would acquire a majority stake in Northgate Capital as part of a $1 billion plan to expand its global investment portfolio.

Shearman & Sterling M&A partner John Marzulli, Jr., and asset management partners Nathan Greene and Don Lonczak in New York led a team from the firm advising Northgate Capital on the deal. The firm was referred to the Danville, Calif.-based funds manager by its investment bankers at Credit Suisse.

Northgate has $3 billion in assets under management. The acquisition by Religare will allow Northgate's five partners, three of whom are former NFL players Brent Jones, Tommy Vardell, and Mark Harris, to retain a controlling interest in their venture capital and private equity units as well as mine asset opportunities in India and Asia.

The transaction is the first U.S. deal by New Delhi-based Religare, which is owned by Indian billionaires Malvinder and Shivinder Singh. The two were once the largest shareholders of India's biggest pharmaceutical firm, Ranbaxy Laboratories, before the family sold its 35 percent stake for roughly $4 billion in June 2008. (Malvinder Singh stepped down as Ranbaxy's CEO the following year.)

The Wall Street Journal reports that the Singh family is using a portion of those proceeds to finance Religare's foray into global asset management. Religare lost out to Hong Kong's Pacific Century Group last year for AIG's external fund management business, The WSJ notes, in a $500 million sale that saw Debevoise & Plimpton and Skadden, Arps, Slate, Meagher & Flom pick up the legal advisory pieces.

The WSJ reports that Religare then turned its acquisition efforts to boutique asset managers like Northgate. Advising Religare on the Northgate deal are Paul, Weiss, Rifkind, Wharton & Garrison M&A partners Robert Goldbaum and Steven Williams in New York. The instruction is understood to be the firm's first for Religare.

Terms of the deal were not disclosed, but the Economic Times of India reports that the 65 percent stake Religare is taking in Northgate could be worth some $200 million. The transaction is expected to close in June.

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